To the members of usha martin limited
Report On The Standalone Ind As Financial Statements
We have audited the accompanying standalone ind as financial statements of usha martinlimited ("the company") which comprise the balance sheet as at 31st march2017 the statement of profit and loss including the statement of other comprehensiveincome the cash flow statement and the statement of changes in equity for the year thenended and a summary of significant accounting policies and other explanatory information.
Managements responsibility for the financial statements
The companys board of directors is responsible for the matters stated in section134(5) of the companies act 2013 ("the act") with respect to the preparation ofthese standalone ind as financial statements that give a true and fair view of thefinancial position financial performance including other comprehensive income cash flowsand changes in equity of the company in accordance with accounting principles generallyaccepted in india including the indian accounting standards (ind as) specified undersection 133 of the act read with the companies (indian accounting standards) rules 2015as amended. This responsibility also includes maintenance of adequate accounting recordsin accordance with the provisions of the act for safeguarding of the assets of the companyand for preventing and detecting frauds and other irregularities; selection andapplication of appropriate accounting policies; making judgments and estimates that arereasonable and prudent; and the design implementation and maintenance of adequateinternal financial control that were operating effectively for ensuring the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofthe ind as financial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.
Our responsibility is to express an opinion on these standalone ind as financialstatements based on our audit. We have taken into account the provisions of the act theaccounting and auditing standards and matters which are required to be included in theaudit report under the provisions of the act and the rules made thereunder. We conductedour audit of the standalone ind as financial statements in accordance with the standardson auditing issued by the institute of chartered accountants of india as specified undersection 143(10) of the act. Those standards require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetherthe financial statements are free from material misstatement. An audit involves performingprocedures to obtain audit evidence about the amounts and disclosures in the financialstatements. The procedures selected depend on the auditors judgment including theassessment of the risks of material misstatement of the standalone ind as financialstatements whether due to fraud or error. In making those risk assessments the auditorconsiders internal financial control relevant to the companys preparation of thestandalone ind as financial statements that give a true and fair view in order to designaudit procedures that are appropriate in the circumstances. An audit also includesevaluating the appropriateness of accounting policies used and the reasonableness of theaccounting estimates made by the companys directors as well as evaluating theoverall presentation of the standalone ind as financial statements. We believe that theaudit evidence we have obtained is sufficient and appropriate to provide a basis for ouraudit opinion on the standalone ind as financial statements. Opinion
In our opinion and to the best of our information and according to the explanationsgiven to us the standalone ind as financial statements give the information required bythe act in the manner so required and give a true and fair view in conformity with theaccounting principles generally accepted in india of the state of affairs of the companyas at 31st march 2017 its loss including other comprehensive income its cash flows andthe changes in equity for the year ended on that date.
Emphasis of matter
We draw attention to note 37(a) regarding recoverability of book values of moveable andimmoveable assets including land and advances for land pertaining to kathautia and loharicoal blocks that were deallocated during the earlier year. The recoverability of such bookvalues is dependent on the outcome of the various measures undertaken by the company asfully explained in the said note. Pending outcome of such measures no adjustments to thefinancial statements in this regard have been considered necessary by the management.
Our opinion is not qualified in respect of this matter.
Report on other legal and regulatory requirements
1. As required by the companies (auditors report) order 2016 ("theorder") issued by the central government of india in terms of sub-section (11) ofsection 143 of the act we give in the annexure-1 a statement on the matters specified inparagraphs 3 and 4 of the order.
2. As required by section 143 (3) of the act we report that:
(a) we have sought and obtained all the information and explanations which to the bestof our knowledge and belief were necessary for the purpose of our audit; (b) in ouropinion proper books of accountas required by law have been kept by the company so far asit appears from our examination of those books; (c) the balance sheet statement of profitand loss including the statement of other comprehensive income the cash flow statementand statement of changes in equity dealt with by this report are in agreement with thebooks of account; (d) in our opinion the aforesaid standalone ind as financial statementscomply with the accounting standards specified under section 133 of the act read withcompanies (indian accounting standards) rules 2015 as amended; (e) on the basis ofwritten representations received from the directors as on 31st march 2017 and taken onrecord by the board of directors none of the directors is disqualified as on 31st march2017 from being appointed as a director in terms of section 164 (2) of the act; (f) withrespect to the adequacy of the internal financial controls over financial reporting of thecompany and the operating effectiveness of such controls refer to our separate report in"annexure-2" to this report; (g) with respect to the other matters to beincluded in the auditors report in accordance with rule 11 of the companies (auditand auditors) rules 2014 in our opinion and to the best of our information and accordingto the explanations given to us: i. The company has disclosed the impact of pendinglitigations on its financial position in its standalone ind as financial statements refer note 14 and 32(c)(i) to the standalone ind as financial statements; ii. The companydid not have any long-term contracts including derivative contracts for which there wereany material foreseeable losses. Iii. There has been no delay in transferring amountsrequired to be transferred to the investor education and protection fund by the company.Iv. The company has provided requisite disclosures in note 9(ii) to these standalone indas financial statements as to the holding of specified bank notes on november 8 2016 anddecember 30 2016 as well as dealings in specified bank notes during the period fromnovember 8 2016 to december 30 2016. Based on our audit procedures and relying on themanagement representation regarding the holding and nature of cash transactions includingspecified bank notes we report that these disclosures are in accordance with the books ofaccounts maintained by the company and as produced to us by the management.
The comparative financial information of the company as at and for the year ended 31stmarch 2016 and the transition date opening balance sheet as at April 1 2015 included inthese standalone ind as financial statements are based on the previously issued statutoryfinancial statements prepared in accordance with the companies (accounting standards)rules 2006 audited by the predecessor auditor whose reports for the year ended 31stmarch 2016 and march 31 2015 dated may 25 2016 and may 25 2015 respectively expressedunmodified opinion on those standalone financial statements as adjusted for thedifferences in the accounting principles adopted by the company on transition to the indas which have been audited by us.
For s.r. Batliboi & co. Llp
Icai firm registration number: 301003e/e300005
Per raj agrawal
Membership number: 82028 place of signature: kolkata date: may 30 2017
annexure 1 referred to in paragraph 1 of the section on "report on other legal andregulatory requirements" of our report of even date
(i) (a) the company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.
(b) the fixed assets are physically verified by the management according to a phasedprogramme designed to cover all the items over a period of three years which in ouropinion is reasonable having regard to the size of the company and the nature of itsassets. Pursuant to the programme a portion of the fixed assets has been physicallyverified by the management during the year and no material discrepancies were noticed onsuch verification.
(c) according to the information and explanations given by the management the titledeeds of immovable properties included in property plant and equipment and other currentassets are held in the name of the company except for the following for reasons set outin the respective notes to the standalone financial statements as mentioned below.
|Sl. No. ||Class of asset ||No. Of Cases ||Gross Block (rs In lakhs) ||Net block (rs in Lakhs) ||Remarks |
|1 ||Freehold land ||4 ||2989 ||2989 ||Refer note |
| || || || || ||3(c)(i) |
|2 ||Leasehold land ||2 ||16 ||4 ||Refer note |
| || || || || ||3(c)(ii) |
|3 ||Buildings ||3 ||113 ||77 ||Refer note |
| || || || || ||3(c)(iii) |
|4 ||Freehold land ||122 ||Net ||282 ||Refer note |
| ||(included in assets Held for sale) || ||Carrying Amount || ||37(e) |
(ii) the management has conducted physical verification of inventory at reasonableintervals except for stores and spares of rs 3698 lakhs which have not been verifiedduring or at the end of the year. In respect of inventory lying with third parties thesehave substantially been confirmed by them. The discrepancies noticed on physicalverification of inventory as compared to book records were not material.
(iii) according to the information and explanations given to us the company has notgranted any loans secured or unsecured to companies firms limited liabilitypartnerships or other parties covered in the register maintained under section 189 of thecompanies act 2013. Accordingly the provisions of clause 3(iii)(a) (b) and (c) of theorder are not applicable to the company and hence not commented upon.
(iv) in our opinion and according to the information and explanations given to us thecompany has not advanced loans to directors / to a company in which the director isinterested to which provisions of section 185 of the companies act 2013 apply and hencenot commented upon. Provisions of section 186 of the companies act 2013 in respect ofloans and advances given investments made and guarantees and securities given have beencomplied with by the company.
(v) the company has not accepted any deposits within the meaning of sections 73 to 76of the act and the companies (acceptance of deposits) rules 2014 (as amended).Accordingly the provisions of clause 3(v) of the order are not applicable.
(vi) we have broadly reviewed the books of account maintained by the company pursuantto the rules made by the central government for the maintenance of cost records undersection 148(1) of the companies act 2013 related to the manufacture of steel and steelproducts and are of the opinion that prima facie the specified accounts and records havebeen made and maintained. We have not however made a detailed examination of the same.
(vii) (a) according to the information and explanations given to us and records of thecompany examined by us in our opinion there have been delays in large number of cases indepositing undisputed statutory dues by the company in respect of income-tax sales-taxservice tax duty of excise and value added tax with the appropriate authorities.thecompany has been regular in deposit of provident fund employees state insuranceduty of custom cess and other material statutory dues as applicable with theappropriate authorities.
(b) according to the information and explanations given to us undisputed dues inrespect of provident fund employees state insurance income-tax service taxsales-tax duty of custom duty of excise value added tax cess and other statutory dueswhich were outstanding at the year end for a period of more than six months from thedate they became payable are as follows:
|Name of the ||Nature of ||Amount ||Period to ||Due ||Date of |
|Statute ||The dues ||(rs. In ||Which the ||Date ||Payment |
| || ||Lakhs) ||Amount || || |
| || || ||Relates || || |
|Central excise ||Interest ||282.54 ||Jul and ||Sep ||Not yet |
|Act 1944 ||And || ||Aug 2016 ||2016 ||Paid |
| ||Penalty || || || || |
|Jharkhand ||Land ||120.77 ||2012 to ||Mar ||Not yet |
|Public ||Revenue || ||2016 ||31st of ||Paid |
|Demand || || || ||Each || |
|Recovery act || || || ||Year || |
(c) according to the records of the company the dues of income-tax sales-tax servicetax duty of custom duty of excise and value added tax which have not been deposited onaccount of any dispute are as follows:
|Name of the statute ||Nature of dues ||Amount * ||Period to which the amount relates ||Forum where the dispute is pending |
| || ||(rs. In lakhs) || || |
|Central and state ||Taxes including ||686.51 ||1986-87 2003-04 2004-05 2009-10 2010- ||Sales tax appellate tribunal |
|Sales tax ||Interest || ||11 and 2011-12 || |
|Act / value added tax || ||7.55 ||1984-85 2006-07 ||Deputy commissioner of commercial taxes |
|Act || ||3276.24 ||2009-10 2011-12 2012-13 and 2013-14 ||Joint commissioner of commercial taxes |
| || ||240.91 ||2010-11 ||Additional commissioner of commercial taxes |
| || ||3.29 ||2005-06 ||Madhya pradesh high court (gwalior bench) |
| || ||16.02 ||2003-04 ||Chennai high court |
|Central excise act ||Duty of excise ||7493.12 ||2001-02 to 2012-13 ||Central excise and service tax appellate |
|1944 ||Including penalty || || ||Tribunal |
| || ||335.90 ||2007-08 to 2015-16 ||Commissioner of central excise (appeals) |
|Finance act 1994 ||Service tax ||17.81 ||2001-02 ||Joint commissioner of central excise |
| || ||79.17 ||2010-11 ||Central excise and service tax appellate |
| || || || ||Tribunal |
|Customs act1962 ||Duty of customs ||15.85 ||1995-96 1996-97 1998-99 2000-01 and ||Deputy commissioner of customs |
| || || ||2008-09 || |
| || ||15.93 ||1989-90 1992-93 and 1993-94 ||Central excise and service tax appellate |
| || || || ||Tribunal |
| || ||836.66 ||1989-90 1996-97 2002-03 2012-13 2014- ||Assistant commissioner of customs |
| || || ||15 and 2015-16 || |
| || ||0.02 ||2005-06 ||Commissioner of customs (appeals) |
|Income tax act 1961 ||Income tax ||551.77 ||Assessment year 1998-99 ||Ranchi high court Income tax appellate tribunal ranchi |
| || ||1388.44 ||Assessment year 2007-08 || |
* net of amounts paid under protest
(viii) in our opinion and according to the information and explanations given by themanagement the company has not defaulted in repayment of loans or borrowing to afinancial institution and banks. The company did not have any loans or borrowing inrespect of government or dues to debenture holders during the year.
(ix) in our opinion and according to the information and explanations given to usmonies raised by way of term loans have been applied on an overall basis for thepurposes for which they were obtained. The company has not raised any moneys by way ofpublic offer (including debt instrument) during the year.
(x) based upon the audit procedures performed for the purpose of reporting the true andfair view of the financial statements and according to the information and explanationsgiven by the management we report that no fraud by the company or no fraud on the companyby the officers and employees of the company has been noticed or reported during the year.(xi) according to the information and explanations given by the management the managerialremuneration has been paid / provided in accordance with the requisite approvals mandatedby the provisions of section 197 read with schedule v to the companies act 2013.
(xii) in our opinion the company is not a nidhi company. Therefore the provisions ofclause 3(xii) of the order are not applicable to the company and hence not commented upon.
(xiii) according to the information and explanations given by the managementtransactions with the related parties are in compliance with sections 177 and 188 of thecompanies act 2013 were applicable and the details have been disclosed in the notes tothe financial statements as required by the applicable accounting standards.
(xiv) according to the information and explanations given to us and on an overallexamination of the balance sheet the company has not made any preferential allotment orprivate placement of shares or fully or partly convertible debentures during the yearunder review and hence reporting requirements under clause 3(xiv) are not applicable tothe company and not commented upon.
(xv) according to the information and explanations given by the management the companyhas not entered into any non-cash transactions with directors or persons connected withhim as referred to in section 192 of companies act 2013.
(xvi) according to the information and explanations given to us the provisions ofsection 45-ia of the reserve bank of india act 1934 are not applicable to the company.
|For s.r. Batliboi & co. Llp |
|Chartered accountants |
|Icai firm registration number: 301003e/e300005 |
|Per raj agrawal |
|Membership number: 82028 |
|Place of signature: kolkata |
|Date: may 30 2017 |
Annexure 2 to the independent auditors report of even date on the standalonefinancial statements of usha martin limted report on the internal financial controls underclause (i) of subsection 3 of section 143 of the companies act 2013 ("the act")
We have audited the internal financial controls over financial reporting of usha martinlimited ("the company") as of 31st march 2017 in conjunction with our audit ofthe standalone financial statements of the company for the year ended on that date. Managementsresponsibility for internal financial controls
The companys management is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablished by the company considering the essential components of internal control statedin the guidance note on audit of internal financial controls over financial reportingissued by the institute of chartered accountants of india. These responsibilities includethe design implementation and maintenance of adequate internal financial controls thatwere operating effectively for ensuring the orderly and efficient conduct of its businessincluding adherence to the companys policies the safeguarding of its assets theprevention and detection of frauds and errors the accuracy and completeness of theaccounting records and the timely preparation of reliable financial information asrequired under the companies act 2013. Auditors responsibility
Our responsibility is to express an opinion on the companys internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the guidance note on audit of internal financial controls over financial reporting(the "guidance note") and the standards on auditing as specified under section143(10) of the companies act 2013 to the extent applicable to an audit of internalfinancial controls and both issued by the institute of chartered accountants of india.Those standards and the guidance note require that we comply with ethical requirements andplan and perform the audit to obtain reasonable assurance about whether adequate internalfinancial controls over financial reporting was established and maintained and if suchcontrols operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditors judgement including the assessment of the risks ofmaterial misstatement of the financial statements whether due to fraud or error. Webelieve that the audit evidence we have obtained is sufficient and appropriate to providea basis for our audit opinion on the internal financial controls system over financialreporting.
Meaning of internal financial controls over financial reporting
A companys internal financial control over financial reporting is a processdesigned to provide reasonable assurance regarding the reliability of financial reportingand the preparation of financial statements for external purposes in accordance withgenerally accepted accounting principles. A companys internal financial control overfinancial reporting includes those policies and procedures that (1) pertain to themaintenance of records that in reasonable detail accurately and fairly reflect thetransactions and dispositions of the assets of the company; (2) provide reasonableassurance that transactions are recorded as necessary to permit preparation of financialstatements in accordance with generally accepted accounting principles and that receiptsand expenditures of the company are being made only in accordance with authorisations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorised acquisition use or disposition of thecompanys assets that could have a material effect on the financial statements.
Inherent limitations of internal financial controls over financial reporting
Because of the inherent limitations of internal financial controls over financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate. Opinion
In our opinion the company has in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at 31st march 2017 based on theinternal control over financial reporting criteria established by the company consideringthe essential components of internal control stated in the guidance note on audit ofinternal financial controls over financial reporting issued by the institute of charteredaccountants of india.
|For s.r. Batliboi & co. Llp |
|Chartered accountants |
|Icai firm registration number: 301003e/e300005 |
|Per raj agrawal |
|Membership number: 82028 |
|Place of signature: kolkata |
|Date: may 30 2017 |